If the city had not stepped in with more cash, Lincoln's main entertainment venue, the Pershing Center, would have run out of money this summer.
DEENA WINTER / Lincoln Journal Star | Posted: Sunday, July 12, 2009 12:00 am
If the city had not stepped in with more cash, Lincoln's main entertainment venue, the Pershing Center, would have run out of money this summer.
Both entertainers and concert-goers are reluctant to leave home as the recession batters the country and people are losing 401K matches, salary increases and jobs.
Late last month, the Lincoln City Council approved a $150,000 infusion of cash to help Pershing keep paying its bills. That's on top of the $575,000 city subsidy Pershing received this year.
Pershing General Manager Tom Lorenz says it's not just Pershing that's struggling. Mid-sized arenas - Pershing can seat 7,500 - are hurting all over the country as the concert industry pulls back.
Pershing Advisory Board member Dave McBride said despite employees' best efforts to cut costs, revenue fell short of projections.
"In this economy, that's not a surprise, especially for a facility that depends heavily on the public's discretionary income for support of its events," he said.
Concerts are Pershing's big money-makers, but the auditorium hasn't had a major concert since October. Normally, it hosts six to 10 concerts per year, but this fiscal year will likely end with half that.
And attendance has been down for the events it has hosted: Sesame Street Live's revenue was down nearly $40,000 from the prior year.
"When you have every event that's down a bit, it takes a toll," Lorenz said.
And two big annual events - the USA Roller Sports championship and Midwest Eightball tourney - moved to other cities this year, although next year both will come back in 2010. The rollerskating championships bring in some 7,000 people over 24 days.
Like most arenas, Pershing Center would lose money every year if not for a city subsidy. Since 2003, it has received about half a million dollars a year. Prior to that, it averaged $400,000 dating back to 1997. In the upcoming budget, Pershing is asking for a $642,000 subsidy from the city.
The aging building's maintenance bills are expected to keep rising, which some proponents of a new arena have used to bolster their argument. Lincolnites are expected to vote in the spring on whether to build a new arena.
However, a new arena would also likely require a subsidy.
Lorenz said even though Pershing will require a larger subsidy this year, it's still an economic engine for the city, drawing events that fill hotels, parking garages, bars and restaurants. That's why cities subsidize arenas, although Lorenz said Omaha's Qwest Center has generated enough operating revenue that it has stopped taking a city subsidy. (Its construction debt is a separate issue.)
One of the reasons the market for mid-size events is being squeezed is that concert tours are no longer are paid for by record companies, so entertainers have to make their own money. That means fewer tours, higher ticket prices and a concentration on large venues, where they'll make more money.
"Mid-level tours can't make numbers," Lorenz said. "As much as I'd love to do Billy Joel, Billy Joel is not going to play Pershing Center."
Most arenas make money off rent, parking - Pershing gets no parking revenue - and food and beverages, but Pershing's narrow concourses can get packed with people, deterring people from spending money at the concessions.
"When the concourse is so packed, a lot of people just stay in their seats," Lorenz said.
The 1940s-era building doesn't have huge food courts or message signs and ribbon boards for advertising. And its outdated amenities can't accommodate some shows.
"Unfortunately the building is such that it cannot attract some of the higher quality shows which are still touring," said Jim O'Hanlon, a member of the Pershing Advisory Committee. He said even companies that use Pershing for company events have pulled back.
"Things look better for next year, but this year is tough," he said.
Advisory Board President Sharon Wherry said Pershing has cut expenses by leaving a position vacant, turning off lights and heaters between winter events - except for space heaters in the offices - and cutting its 401K match.
"It's been a tough time but we're confident that we'll get through it," she said.
Lorenz believes things will pick up during the next fiscal year. A merchandise "super sale" and The Wiggles are scheduled for July and August will bring Men at the Cross (a Christian men's event), citywide class reunion, Ribfest, World Wrestling Entertainment and roller derby.
McBride said the board hopes Pershing won't need to spend the entire $150,000 it just got from the city.
"With good weather and good support from the community," he said, "our upcoming Ribfest event could generate better income than the staff's current, conservative estimates and significantly help the bottom line."
Reach Deena Winter at 473-2642 or dwinter@journalstar.com.